A Korean retirement pension account carries your name, but you cannot simply take money out of it. The permitted grounds are a closed list in the Enforcement Decree, and anything not on the list is not allowed. Read two provisions side by side, though, and an odd gap appears — some grounds let you pledge the account as security but not withdraw from it.
1. There are two lists. Article 2 of the Decree sets the grounds for pledging the entitlement; article 14 sets the grounds for early withdrawal. Article 14 calls only some of article 2’s items.
2. University fees, weddings and funerals appear only on the pledge list. They are item 4-2 of article 2(1), and article 14 does not call that item.
3. Medical costs carry one extra threshold. Pledging needs six months or more of treatment; withdrawing needs that and spending more than 125/1,000 of your annual wages.
4. Repaying a pledge loan is narrower than it sounds. The ministry notice limits it to a loan taken on the art. 2(1)5 grounds (shutdown or disaster) that is three months or more in arrears — withdrawing to repay a tuition loan does not qualify.
This piece covers article 14, which applies to defined-contribution (DC) and individual (IRP) accounts. The interim settlement of statutory severance pay is a different provision (Decree art. 3), opened later in the interim-settlement checker, which lays the three lists side by side.
Two lists, and the second one is shorter
Enforcement Decree of the Act on the Guarantee of Workers’ Retirement Benefits, article 14 (grounds for early withdrawal from a defined-contribution plan) (1) “Grounds prescribed by Presidential Decree, such as the purchase of a house” in article 22 of the Act means any of the following. <Amended 15 Dec 2015, 2 Jul 2019, 29 Oct 2019, 3 Nov 2020>
1. Where article 2(1) item 1, item 1-2 or item 5 (limited to damage from a disaster) applies
1-2. Where article 2(1) item 2 applies and the member bears medical costs exceeding 125/1,000 of their own annual wages
2. … declared bankrupt within the preceding five years
3. … granted a decision to commence individual rehabilitation within the preceding five years
4. Where a member who has pledged the entitlement and taken a loan needs to repay that loan, on grounds published by the Minister of Employment and Labor
The very first item points at another provision. It picks up only items 1, 1-2 and 5 of article 2(1). So what else does article 2 contain?
| Ground | Art. 2 pledge | Art. 14 withdraw |
|---|---|---|
| Buying a house, no other home owned (item 1) | Yes | Yes |
| Jeonse or rental deposit, no other home owned (item 1-2) | Yes | Yes |
| Medical costs, 6 months+ of treatment (item 2) | Yes | +threshold |
| Bankruptcy (within 5 years) | Yes | Yes |
| Individual rehabilitation (within 5 years) | Yes | Yes |
| University fees, wedding or funeral costs (item 4-2) | Yes | no |
| Employer suspension of business etc. (item 5) | Yes | disasters only |
The last two rows are the point of this piece.
Fees, weddings and funerals sit on the pledge list only
Same Decree, article 2 (grounds for pledging a retirement pension entitlement) (1) … means any of the following.
…
4-2. Where the member bears the university fees, wedding costs or funeral costs of any of the following
(a) the member (b) the member’s spouse (c) a dependent of the member or their spouse
The items article 14(1) calls are 1, 1-2, 5 (disasters only) and 2. Item 4-2 appears nowhere. That is what the structure says — an urgent tuition bill does not open a DC account for withdrawal; what it opens is the route of pledging the entitlement and borrowing against it.
Article 14(1) item 4 reads: “where a member who has pledged the entitlement and taken a loan is repaying the principal and interest of that loan, in a case falling within grounds published by the Minister of Employment and Labor.” The previous edition read that as “repaying such a loan is itself a withdrawal ground.” We have now opened the notice, and that reading was too wide.
Ministry of Employment and Labor Notice 2020-139, part III — requirements for DC withdrawal
“The requirement for withdrawal from a defined-contribution plan under Decree art. 14(1)4 is that a member who took a loan against the pledged entitlement on the grounds in Decree art. 2(1)5 has failed to repay the loan and is three months or more in arrears.”
The door narrows twice. First, not any pledge loan will do — it must be a loan taken on item 5 of article 2(1), that is, because the employer shut down and wages fell, or a disaster caused damage. Second, that loan must already be three months or more in arrears.
So the route suggested a paragraph ago is closed. Taking a pledge loan for university fees (item 4-2) and then withdrawing savings to repay it does not work once the provision and the notice are read together. Item 4-2 goes as far as the pledge and no further. On top of that, the withdrawal is capped at what the repayment requires (art. 14(2)).
Only medical costs carry a second threshold
Article 2(1) item 2 covers medical costs for the member, their spouse or a dependent needing six months or more of treatment. For a pledge that is enough. For a withdrawal, article 14(1) item 1-2 adds a condition — “exceeding 125/1,000 of their own annual wages”.
125/1,000 is 12.5 per cent. The threshold therefore tracks the wage.
| Annual wages | 125/1,000 | Spending must exceed |
|---|---|---|
| 30m won | 3.75m won | 3.75m won |
| 40m won | 5m won | 5m won |
| 50m won | 6.25m won | 6.25m won |
| 60m won | 7.5m won | 7.5m won |
| 80m won | 10m won | 10m won |
The arithmetic is ours — annual wages × 0.125. What is worth noticing is that the direction inverts: the higher the wage, the higher the bar. The same 8m won of medical spending clears it at 50m won of wages and fails at 80m.
The provision also borrows its definition of medical costs from another statute — article 2(1) item 2 says “medical costs under article 118-5(1) and (2) of the Enforcement Decree of the Income Tax Act”. We opened that one too. Paragraph (1) covers seven things “borne directly by the worker”.
| Counted (art. 118-5(1)) | Cap or condition in the text |
|---|---|
| Amounts paid to a medical institution for examination, treatment or prevention | — |
| Medicines (including herbal medicine) for treatment or care | — |
| Disability aids and medical devices bought or leased | on a practitioner's prescription |
| Corrective glasses or contact lenses | 500,000 won a person a year |
| Hearing aids | — |
| Long-term care and disability activity support benefits | the co-payment actually paid |
| Postnatal care centres | 2m won per birth |
The exclusions are in the text as well. Paragraph (2): “costs for cosmetic or plastic surgery and medicines bought to improve health are not included.” And a parenthesis in paragraph (1) subtracts anything reimbursed by indemnity health insurance. What counts is the amount you actually bore.
The deposit ground is “once per employer”
Article 2(1) item 1-2 Where a member who owns no house bears, for residential purposes, a jeonse deposit under article 303 of the Civil Act or a rental deposit under article 3-2 of the Housing Lease Protection Act. In this case, it is limited to one occasion while the member works at one business or workplace.
Only this item carries a frequency limit. Item 1, buying a house, has no such sentence. And the unit of the limit is “while working at one business or workplace” — neither per person nor per lifetime.
One more thing: both item 1 and item 1-2 open with “a member who owns no house”. If you own a home, neither ground applies.
The list is not in one place
| Withdrawal ground | Provision | Extra condition in the text |
|---|---|---|
| Buying a house | art. 14(1)1 → art. 2(1)1 | owns no house · in own name |
| Jeonse / rental deposit | art. 14(1)1 → art. 2(1)1-2 | owns no house · once per employer |
| Medical costs | art. 14(1)1-2 → art. 2(1)2 | 6 months+ and over 12.5% of wages |
| Disaster damage | art. 14(1)1 → art. 2(1)5 | disasters only — other cases in item 5 excluded |
| Bankruptcy / rehabilitation | art. 14(1)2 and 3 | within five years counting back |
| Repaying a pledge loan | art. 14(1)4 → Notice III | a loan on art. 2(1)5 grounds + 3 months in arrears + capped at the repayment |
The right-hand column is the point — matching the ground is not enough; every row adds a condition on top. In summary:
- Article 14 does not write the grounds out; it calls article 2.
- Article 2 passes the definition of medical costs to the Income Tax Act Enforcement Decree, article 118-5.
- Article 14(1) item 4 passes again, to a ministry publication.
So “can I withdraw?” has no one-sentence answer. The previous edition stopped here, at the two Decree provisions. With the other two documents now open, the right-hand column is filled in to the end.
The pledge is allowed — but for how much
The same notice also sets the pledge limit. What sets it, though, splits in two by ground.
Decree art. 2(2)
1. For items 1, 1-2, 2 to 4 and 4-2 of paragraph (1) — 50 per cent of the member's accrued balance
2. For item 5 — a limit published by the Minister, having regard to the extent of the damage
The notice (part II) then says: 10 million won for the first limb of item 5 (wages cut by an employer shutdown), and for the second limb (disaster) a damage-based figure — the posted price of the dwelling, the deposit needed to rent one, 50% of the balance where a family member is missing, or the medical costs actually borne, summed where the damage is combined. And in no case more than 50% of the balance (proviso to the same part).
The shutdown test is in the notice too (part I.1): the monthly wage in some month of the shutdown must have fallen by 30 per cent or more against either the month before the shutdown began or the average of the three months before it, or against the monthly average of the previous calendar year. The disaster limb (I.2) has three cases: a dwelling swept away, destroyed or half-destroyed, a spouse or dependant missing, and damage needing 15 days or more of hospital treatment.
And even when a withdrawal is allowed, the tax treatment is a separate question — the structure of the lump-sum tax is in our Korean severance tax calculator. We did not verify the provisions behind the alternative rates in this piece.
Where readers usually go wrong
Does this apply to DB plans?
The heading of article 14 says “defined-contribution plan”. The provision names DC in its own title. How DB and DC differ is set out in DB versus DC. We did not check the DB position here.
Is interim settlement the same thing?
No. This piece is about early withdrawal from retirement pension savings; interim settlement of statutory severance pay is a different provision - Decree art. 3, opened in the interim-settlement checker. The wage-peak and hours-cut reasons exist only there. The names are close enough to be confused easily.
What happens to my years of service?
Retirement income tax turns heavily on years of service — on the same amount, shorter service costs far more. Change the service field in the severance tax calculator and the spread is immediate. How service is counted after a withdrawal, we did not check.
What about money that earned a tax credit?
Contributions that attracted a tax credit are treated differently depending on how they later come out — see pension savings and IRP tax credits and the three tiers of Korean pensions for that structure.
The savings carry your name, but the Decree decides what counts as a reason to reach them. And a reason good enough to pledge the account is not automatically good enough to empty part of it.
Sources
- Korean Law Information Center, Ministry of Government Legislation — statutory text — Enforcement Decree of the Act on the Guarantee of Workers’ Retirement Benefits, article 14. The items of paragraph (1) and the cap in paragraph (2) are transcribed from the text. This version is in force from 24 March 2026, Presidential Decree No. 36220.
- Korean Law Information Center — statutory text — the same Decree, article 2. Items 1, 1-2, 2 and 4-2 come straight from the text; the observation that article 14 does not call item 4-2 is ours, from placing the two provisions side by side.
- Korean Law Information Center — administrative rule — Notice on the grounds and requirements for pledging pension entitlements and for interim settlement, and the pledge limits, Ministry of Employment and Labor Notice 2020-139, in force 21 Dec. 2020. Source for part I (shutdown and disaster tests), part II (limits) and part III (withdrawal: an art. 2(1)5 loan, three months in arrears).
- Korean Law Information Center — statutory text — Income Tax Act Enforcement Decree art. 118-5. Source for the seven items in paragraph (1) (including the 500,000-won glasses cap and the 2m-won postnatal cap), the exclusions in paragraph (2), and the deduction of indemnity insurance payouts.
- Korean Law Information Center — statutory text — the same Decree, art. 2(2). Source for “50 per cent of the balance” for items 1, 1-2, 2 to 4 and 4-2 and “a published limit” for item 5.
- The threshold figures are ours — the statutory 125/1,000 applied to annual wages (30m won → 3.75m won, and so on). The Decree states a ratio, not a table of amounts. The pledge-limit chart is likewise ours — the lower of “50% of the balance” and “10m won” applied to five illustrative balances.
Where to check further
- How “three months in arrears” is evidenced. The notice states the fact of arrears but not what proves it — that is a question for whoever holds the account.
- How the disaster limit's “posted price” is set. Part II.2 defers to arts. 16 to 18 of the Act on the Public Announcement of Real Estate Values — we did not open that Act.
- Interim settlement of statutory severance pay. The same notice also covers interim settlement (Decree art. 3(1)7), but what we read is the pledge and withdrawal side — the full interim-settlement list is in the interim-settlement checker.
- Paperwork in practice. Even on a valid ground, what evidence is required varies by provider — ask whoever holds the account.
Written as of August 2026. The quoted provisions are the text as published by the Korean Law Information Center, and the comparison table and threshold figures are our own, from reading the two provisions against each other and applying the stated ratio. In September 2026 we opened Ministry Notice 2020-139 and article 118-5 of the Income Tax Act Enforcement Decree, filling the two boxes left blank — and in doing so corrected a sentence that had read article 14(1) item 4 too widely. Our other everyday tools are in the calculator index.
